The Retirement Group is offering a new service called the TelecomKit, a cash flow analysis that will help employees working for telecommunications companies determine the right time to retire. The service includes a complimentary cash flow analysis which takes into account an employee’s pension, 401(k), home equity, healthcare costs and outside assets. The Retirement Group decided to launch this new service after realizing that there are significant factors which may allow certain employees to retire earlier than they had previously anticipated.
Rising interest rates are one of the major factors which may make some employees consider an early retirement. At certain companies, like AT&T and Verizon, where employees can opt to receive their pension in a lump-sum, the amount they receive for that lump-sum is partially determined by interest rates. With all other factors held stagnant, if interest rates increase by just 1%, lump-sums will decrease by about 10%. Interest rates have been on the rise over the course of the last few months and if this trend continues employees will see a drop in their lump-sum. These conditions may make it advantageous for employees to leave their company and lock in lower interest rates. This issue is particularly important for AT&T employees considering the November interest rates will determine their lump-sum values for all of 2022. AT&T employees who leave the company in 2021 will be able to lock in lower 2020 interest rates.
The current housing market is another factor which should be taken into account when determining an employee’s retirement date. The United States is currently in a strong seller’s market, and many homeowners have seen the equity in their home increase substantially. Employees nearing retirement age should be following the housing market closely as many of them have a majority of their net worth tied to the value of their home. Home equity is currently at record levels, which is excellent news for many Fortune 500 employees who are considering retirement. Homeowners can cash in the increased equity by selling their home, downsizing, and putting the money they made towards their retirement savings.
In addition to home equity rising, 401(k)s have seen a substantial increase in corporate plans. This is a result of a combination of factors, including stock market performance and a current savings rate, which is the highest in the history of the United States. The Retirement Group has coined the phrase, “What is the result of increased home equity, low interest rates, and rising 401(k)s? An early retirement.”
The Telecomkit will take all of the above factors into consideration and determine if the benefits of an employee staying with their company outweigh the benefits of leaving their company. As The Retirement Group states on their website, despite these factors, it may be beneficial for certain employees’ to stay with their company and continue saving for retirement. Employees of telecommunications companies can request a TelecomKit by clicking here to schedule a call. They can also get started on their TelecomKit by filling out the form on this page: https://retirekit.theretirementgroup.com/analyze
Disclosure: The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, access.att.com, AT&T, or Verizon. The Retirement Group is an independent financial advisory group that focuses on transition planning and lump sum distribution. Neither The Retirement Group or FSC Securities provide tax or legal advice. Please call the office at 800-900-5867 for additional questions or for help in the retirement planning process.
Securities offered through FSC Securities Corporation (FSC) member FINRA/SIPC. Investment advisory services offered through The Retirement Group, LLC. FSC is separately owned and other entities and/or marketing names, products or services referenced here are independent of FSC. Office of Supervisory Jurisdiction: 5414 Oberlin Dr #220, San Diego CA 92121. AT&T is not affiliated nor endorsed by The Retirement Group or FSC Securities
This is Not the 2007 Housing Bubble” The Retirement Group, 25 April. 2021, https://theretirementgroup.com/